Ready to buy a house and need to know the next step

[Anonymous]

My scores were EQ 590 TU 611 Ex 613

My husbands EQ 587 TU 620 EX 565

We are looking to get an FHA loan and were told we needed to settlle the collections. I was told any item over $250 and anything that would total $1000 needed to be paid. So, we settled everything but one small $60 collection. Mind you these collections were 3-5 years old. We have bankruptcy that was discharged 3/04.

By the end of september we will have paid everything. No one agreed to use payment for deletion. The best I go was paid in full,and some still will say settled for less than owed. But, to quailfy for FHA we needed to pay them anyways.

For credit card information I have

First Premier limit is 200 owe $99 but will pay off balance entirely 9-11

Orchard bank limit is 200 owe $129 but will pay balance entirely 9-11.

Credit one Bank limit is 250 current balance is 201.45 but plan to pay off almost entirely (keep under 9% util) by oct 9

Frist Premier limit 300 balance 231.95 will make $50 payments every 2 weeks for now

My husband has

HMFC car loan owe 7450 paid on time every month

Best Buy limit 600 balance 580 will pay $200 oct 9.

Fingerhut limit 400 balance 350 will pay %50 oct 9

Continental limit 375 balance 345 will pay $50 9-11 and pay off oct 23.

Orchard bank limit 300 balance 245 will pay off 9-25

First Premier limit 350 balance 225 will pay off 10-9.

We make every payment on time and with our plan will have most paid off by the end of october.

We hired lawyers to delete old account but are beginning to think they are a waste of time and money. Is there anything we can send to the credit bereaus and collection agnecies to help? We were told if we could get our points to 620 we could get the loan.. and are hoping to catch the tax break before dec 1. We pay our rent on time every month and all our utilites so paying a mortgage isnt a problem. I just need to clean the report up as much as we can... advice?

[llecs]

Welcome to the forums!

If those scores were given to you by a lender, then you have FICO scores. If you pulled those scores, then you don't have FICO scores and you may want to pull from here.

Send GWs to the CAs asking for deletion.

For max points, your goal should be to pay all but one CC to $0 and let $0 report (it would be around your statement date). Let the remaining CC report a small balance of less than 9%.

For your Orchard, if you want it to report a lower balance next month, pay that with a Rush payment ASAP!! Pay extra to cover the Rush fee. Orchard reporting is weird. They will report the balance you have showing on the last business day of the month (Monday) and will report that around the 15th of the following month, YMMV. So, if you pay it Sept. 11, then it won't report until mid October. If you pay Monday, it would be too late. Same goes for your DH's account.

Don't hire any attorney. You are wasting your money. GW letters only cost less than a buck with paper, little toner, envelope, and a stamp.

[Anonymous]

I wrote letters that state the CA will delete accounts in exchange for payment on the account. I also wrote that I will withdraw my settlement offer if payment for deletion is not verified in writing. Should I send these? Wil they hurt the arrangements I have made? I need to settle these collection to qualify for FHA, so if i send these letters wil they hurt my chances of keeping the arrangement to settle? Im paying on my balances as much as I can, trying to get to 0 balance or as low as possible. How much will my points drop by settling old collections? Im so close right now, I really only need 30 points to get the loan, but Id like to make sure what Im doing isnt going to hurt me more...

[llecs]

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bobnraven wrote:
I wrote letters that state the CA will delete accounts in exchange for payment on the account. I also wrote that I will withdraw my settlement offer if payment for deletion is not verified in writing. Should I send these? Wil they hurt the arrangements I have made? I need to settle these collection to qualify for FHA, so if i send these letters wil they hurt my chances of keeping the arrangement to settle? Im paying on my balances as much as I can, trying to get to 0 balance or as low as possible. How much will my points drop by settling old collections? Im so close right now, I really only need 30 points to get the loan, but Id like to make sure what Im doing isnt going to hurt me more...

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If you settled without a PFD, then they'll only update and your score will not increase. Some may argue that it will stay the same. From reading other posts, I'd argue that you'd lose points if it was an old collection and it updated to read as a newer one.

If you already are paying due to a settlement agreement, then you'd have to assume that they would cancel that settlement. Then you'd have to ask yourself whether or not the difference between the settlement and the PIF amount is worth risking to have the baddie removed. Worse case scenario, you could always PIF. If I was in the situation, I would send a PFD with the settlement amount org. owed as the amount that I'm offering to pay. If a CA was $250 and I settled for $100 without a PFD w/ $50 per month, then I'd send the PFD for $100.

[Anonymous]

no one agreed to delete once paid. I have a credit card where the limit was 300, we ran into bad luck and its now sitting in collection for $1903. can you believe that? on a 300 credit card? anyways, the would settle for 30% of the balance leaving me responsible to pay $570. They would not entertain payment for deletion at all, and I cannot afford to pay the entire amount. There are a total of 6 collections. I did get some to note paid in full, but most are saying settled for less than owed. Im sending the request for deletion anywyas, not threatening simply requestion. Im also sending proof I paid or settled to the credit bureau. So now I wait 30 days for a response? Is there any more I can do? I know I needed to settle these to qualify for FHA funding, but Im hoping its not going to make my score worse....

[llecs]

I wouldn't send anything to the CRAs. I you search within the Mortgage forum for "dispute", you'll see a large number of posters being denied because of a dispute listed on their CR. A dispute can easily drop your score too if dates get updated, the CA marks extra lates (they love to do that), etc.

I'd copy the settlement agreement and send it out as a PFD. AND I would continue paying based on any existing agreement. If after 30-45 days I didn't have an affirmative response, then I would pay off each collection per the agreement and GW them on a later date.

[Anonymous]

yea, I will def not mail those letters to the CBR's. Thanks for the advice. I also have assumed I wont be able to buy before Dec. At this point I just want to fix what i can and raise it as fast as I can... realisticly we only need a 40pt jump up. So ill take it as I can. I will have paid all my CC's down to zero or less than 10% balance except one.. seeing how i was 99% util this HAS to help me? DO you think ill have a huge drop from settling on  the 5 or 6 collections? Esp since its not all going to be paid in full? When would I expect to see the new results ont he credit reports? and when would I see the difference in the balances on our credit  cards reflected on the reports too? At what point so I contact the credit bureaus?